The diamonds unwanted by the bride have been highly praised by NVIDIA.

The lab-grown diamonds once "abandoned" by the market have now made a strong comeback due to the demand for AI computing power heat dissipation. Driven by NVIDIA, diamond heat dissipation materials have become the key to breaking through the performance bottleneck of chips. The industry logic has been reshaped from the "symbol of love" to "cutting-edge technology".

01

The Resurgence of Lab-Grown Diamonds

What other uses does a diamond have besides symbolizing love?

Now, there is a new answer. Since the beginning of this year, the market of the lab-grown diamond track in the A-share market has fully exploded. As of May 25th, the Wind lab-grown diamond concept index has risen by 71.33% since the beginning of the year. Among them, the stock prices of four stocks, namely LiLiang Diamond, SiFangDa, HuangHeXuanFeng, and WoErDe, have all increased by more than 100%. The stock price of GuoJiJingGong has increased by more than 30%, and the stock prices of HuiFeng Diamond, HengSheng Energy, and ZhongBingHongJian have increased in the range of 3% to 15%.

In terms of market value, the total market value of the eight constituent stocks reached 141.7 billion yuan on May 25th, a sharp increase of 49 billion yuan compared with the beginning of the year.

Before this, the lab-grown diamond industry had experienced a deep downturn for many years. This downturn started in the second half of 2022 and lasted until the second half of 2024. The core characteristics were a sharp drop in prices, industry losses, and a cooling market. During this period, the Wind lab-grown diamond concept index once dropped to as low as 924 points, but now it has rebounded to over 5,600 points against the trend, and the huge increase has attracted wide attention from the market.

▲The trend of the lab-grown diamond index

Interestingly, this wave of sharp increase is not because brides like to wear diamond rings again, but because the function of lab-grown diamonds as chip heat sinks has been discovered.

According to CCTV Finance, as the hardest substance in nature, diamond (the professional name of lab-grown diamonds in the industrial field) has always been known as the "industrial tooth". In the past, the industrial uses of diamonds were mainly concentrated in the fields of cutting and wear resistance.

In the past two years, with the development of computing power infrastructure driven by AI, the heat dissipation application of diamonds has exploded. From industrial abrasives sold by the ton, they have become "chip heat dissipation stickers" sold by the piece. It is understood that diamond has excellent physical thermal conductivity, and its thermal conductivity is 5 times that of copper and 10 times that of silicon.

What's more, in February this year, NVIDIA announced that its next-generation GPU chips will fully adopt a new heat dissipation solution of "diamond composite material + liquid cooling".

Moreover, Jensen Huang, the CEO of NVIDIA, has taken action and is looking for a suitable diamond heat dissipation cooperation partner in China.

On January 28th, "Chaoying Diamond", a supplier of diamond technology application materials, posted a photo of its CEO Zhu Yanhui and Jensen Huang on its official WeChat account and captioned it, saying that the two sides had a meeting during Jensen Huang's first visit to China in 2026. The main theme of the meeting was to jointly promote the industrialization process of the fourth-generation semiconductor diamond wafers.

Zhu Yanhui mentioned that the diamond-copper composite material developed by Chaoying Diamond can effectively solve the heat dissipation problem of high-power density AI chips with its excellent thermal conductivity and has passed the verification process of NVIDIA's supply chain. He also said, "The combination of diamond materials and AI computing power is an important path to break through the performance bottleneck of high-end chips."

As we all know, NVIDIA is the undisputed leader in the AI chip market. According to data from the industry analysis institution TrendForce, in 2025, NVIDIA GPUs accounted for 75.9% of AI servers, leaving its competitors far behind. China's lab-grown diamonds also have obvious advantages worldwide. The "2025 Lab-Grown Diamond Industry Development Report" shows that as of now, the global production capacity of lab-grown diamond rough is about 40 million carats, and China's production capacity is about 25.2 million carats, accounting for about 63%.

In this context, the aforementioned news about diamond heat dissipation and NVIDIA's eagerness to layout has set the tone for the bright future of China's lab-grown diamonds.

This situation made Huang Feng, a fund practitioner focusing on technology investment, quite emotional. "This reminds people of the wave of AI computing power market in 2023. When the power consumption of NVIDIA GPUs exceeded 700W, the heat dissipation solution changed from air cooling to liquid cooling, and the stock prices of related stocks increased by more than 300%. Now, as the power consumption of AI chips continues to increase, diamond heat dissipation materials are standing at the same industrial inflection point."

He told "Caixin Global" that the mainstream view in the market has always had a cognitive bias towards lab-grown diamonds, thinking that lab-grown diamonds are only a "jewelry concept". In fact, the application space of industrial diamonds in the fields of semiconductors, photovoltaics, aerospace, etc. far exceeds that of the jewelry market. According to industry data, industrial diamonds account for about 70%, and jewelry-grade diamonds only account for 30%.

So, which lab-grown diamond concept stocks have made substantial progress in chip heat dissipation?

According to public information, HuangHeXuanFeng set the semiconductor heat dissipation track as the core direction of strategic transformation a few years ago and accelerated the industrialization process of high-value-added diamond heat dissipation materials. In February this year, the company announced that the first domestic 8-inch diamond heat sink production line was officially put into operation. At the performance briefing in May, issues such as the output and yield rate of diamond heat sinks attracted much attention from investors. In response, Li Ge, the chairman of the company, said that as of now, the 8-inch diamond heat sinks can be produced at an annual output of 20,000 pieces, and the orders are being delivered one after another.

Also in May, SiFangDa and LiLiang Diamond also had good news one after another.

SiFangDa told investors on the interactive platform that its diamond heat sinks have passed the tests of overseas customers, the verification progress is in line with expectations, and it has entered the stage of small-batch supply. Fang Haijiang, the chairman of the company, also confirmed in an interview with CCTV that from the perspective of the demand for heat sinks, the current production capacity cannot meet the market demand at all. Therefore, the company has recently planned a new factory and plans to complete and put this project into operation by the end of next year.

LiLiang Diamond expressed high optimism about the market space and development potential of diamond heat dissipation in the investor research minutes. The company said that the diamond heat dissipation materials have entered the window period of large-scale application, and it can be clearly felt that the demand from downstream customers is continuously increasing. Recently, many well-known domestic semiconductor companies and technology companies have actively contacted the company and successively promoted cooperation in sample delivery, R & D, testing, etc.

In addition, ZhongBingHongJian said that the company is closely following the application research and market expansion in the heat dissipation field. At present, the diamond heat sinks have achieved small-batch production, and it is actively carrying out technical docking with downstream application enterprises. HuiFeng Diamond revealed that in 2025, the company focused on new product development and project promotion, targeted the recovery of the industry cycle and the heat dissipation track, built a full industrial chain covering high-thermal-conductivity diamond single crystals, high-performance diamond powders, and high-thermal-conductivity diamond metal composite materials, and formed a product matrix of CVD heat sinks, semiconductor functional materials, and lab-grown diamonds.

02

An Unexpected Turn

Looking back on the past few years, the lab-grown diamond industry has experienced a process of ups and downs from "being pursued by the market" to "being ignored" and then to "value revaluation".

The beginning of the story was full of glory. Lab-grown diamonds entered the vision of domestic consumers around 2018 as consumer goods. Since they are the same as natural diamonds in terms of appearance, crystal structure, and chemical composition, but much cheaper in price, they have been labeled as "environmentally friendly and cost-effective".

In 2021, the popularity of lab-grown diamonds exploded. The annual increases of HuangHeXuanFeng and ZhongBingHongJian reached 209% and 166% respectively. LiLiang Diamond, which was listed on September 24th of that year, saw its stock price skyrocket by more than 11 times on the first day, from 20.62 yuan to 250 yuan, a veritable "dark horse in the industry".

For a while, lab-grown diamonds were in the limelight and were regarded by the capital market as the "star of tomorrow" that would subvert the traditional jewelry industry.

However, the feast passed by in a flash. With the concentrated explosion of domestic production capacity and the gradually formed cautious consumption habits of consumers, just two years later, lab-grown diamonds suffered a blow, and the "artificial romance" became worthless.

A lab-grown diamond practitioner revealed that a 1-carat lab-grown diamond could be sold for up to 30,000 yuan in 2021 and 2022, but by the end of 2024, consumers could buy it for 5,000 to 6,000 yuan after a discount. Affected by this, from jewelry dealers to lab-grown diamond enterprises, they were all caught in a situation of serious inventory backlog and difficult capital recovery.

The financial data is enough to illustrate the problem. In 2024, the net profits attributable to the parent companies of HuangHeXuanFeng, LiLiang Diamond, and ZhongBingHongJian decreased by 23.14%, 44.79%, and 139.52% respectively year-on-year, and the stock prices were getting worse day by day. Among them, the stock price of LiLiang Diamond once dropped to 21 yuan.

Just when the market generally thought that the lab-grown diamond industry would continue to slump, the industry has an unexpected turn. Strangely enough, the driving factor behind this was not the recovery of traditional jewelry consumption, but a heat dissipation crisis from the high-tech AI chip field.

Benefiting from the "change of the market", many investors have reaped a lot. On the Xueqiu community, an investor who firmly believes in lab-grown diamonds has been constantly updating his dynamics. He bought LiLiang Diamond and SiFangDa at prices of about 30 yuan and about 10 yuan respectively in September last year. At that time, the market generally thought it was difficult for LiLiang Diamond to reach 40 yuan, but after two waves of increases in October last year and February this year, the company's stock price directly reached 50 yuan.

If calculated based on the closing prices of LiLiang Diamond at 74.61 yuan and SiFangDa at 37.21 yuan on May 25th, in just over half a year, the investor's yields reached 148% and 272% respectively.

In terms of institutions and hot money, confidence is also strengthening. "Caixin Global" noticed that on May 20th, the net inflow of main funds in the Wind lab-grown diamond concept index was only 251 million yuan, and the funds were in a "dormant" state. It increased to 2.739 billion yuan on May 22nd and still remained at a relatively high net inflow of nearly 1 billion yuan on May 25th.

In this regard, an investor explained from the investment logic of the entire technology market, "The climax of technology hardware is almost over, but the funds that have invested in technology hardware are not willing to switch to other cycles. Therefore, they will choose other directions within the technology field, such as software and heat dissipation materials. Among them, the heat dissipation sector has formed a certain expectation, and the related diamond sub-track is indeed a good choice."

In fact, as early as the trough of the industry in 2024, some research institutions mentioned the heat dissipation performance of lab-grown diamonds. HuaAn Securities wrote in a research report in December 2024 that the terminal demand for lab-grown diamonds covers two major fields: consumption and industry. In addition to the well-known consumer end, in the industrial end, lab-grown diamonds, that is, artificial diamonds, are widely used in processes such as cutting, grinding, drilling, and polishing and are the mainstream building material cutting tools.

The report also said that in the further high-tech field, the application of lab-grown diamonds is gradually breaking through traditional boundaries, especially showing great potential in heat dissipation and quantum computing carriers. As a new semiconductor material, diamond can efficiently dissipate heat and operate stably in high-power and high-frequency applications, and is worthy of being called the "ultimate semiconductor material". At that time, Huawei took the lead in announcing a patent related to diamond heat dissipation technology to solve the heat dissipation problem of modern chips.

Now, in the face of the current popularity of lab-grown diamonds, an investor in the technology track told "Caixin Global" with longing, "The more advanced the AI chips are and the higher the power consumption is, the stronger the irreplaceability of diamond heat dissipation will be. In the past, the market hyped up GPUs and optical modules. In the future, it will focus on the computing power itself, and the heat dissipation materials are determining the 'ceiling' of computing power. It can be said that in the second half of the computing power competition, lab-grown diamonds will be a key link."

Of course, technological breakthrough does not mean immediate performance realization. "It usually takes 18 to 24 months from the laboratory to mass production, and there are multiple uncertainties such as process yield, customer certification, and production capacity ramp-up during this period," Huang Feng mentioned. He also believes that in the short term, the popularity of the lab-grown diamond sector is expected to continue, but in the long term, it is crucial to observe the technical details, mass production schedule, and whether there are definite downstream customers of each company.

As of May 25th, with the rise of stock prices, the rolling price-to-earnings ratios of SiFangDa and LiLiang Diamond have reached as high as 179 times and 157 times respectively. The popularity of the "diamond" as a heat dissipation material is obvious.

(Huang Feng in the article is a pseudonym)

This article is from the WeChat public account "Caixin Global WEEKLY", author: Chen Dazhuang, editor: Lang Ming, published by 36Kr with authorization.